Walk into a Target store anywhere in the U.S. and it’s a safe bet there will be at least a few customer rummaging through the bins of single price point merchandise in the Dollar Spot located just inside store entrances. The ever changing assortment’s treasure hunt appeal and single price point value proposition are simply too much for many customers to bypass. It is enough to make wanna-be merchants wonder if further expansion of the concept makes sense for Target, especially considering the raging success companies such as Dollar General and Family Dollar are having.

All retailers are taking price increases where they can these days, especially in food, but the pace of increases at Walmart has slowed, and its price gap relative to most competitors has widened, according to the most recent pricing survey conducted by Credit Suisse.

Walmart has pegged its success in the United States on widening the price gap with competitors to fulfill its everyday low price value proposition, and again this week senior leaders in the stores division vowed to win on price.

For all the talk of inflation this year, whether it is the price of cotton or the cost of food, Easter won’t cost anymore this year than last year for shoppers who are selective in their purchases at Target.

The retailer featured bagged candy on the cover of this week’s circular at the same $2.69 price point as last year for the same quantities. Inside, felt baskets at $2, Peeps at two for $3, plastic eggs for 65 cents, plush characters at $4.99 and that carrot shaped cellophane thing filled with orange Reese’s Pieces at 99 cents were the same prices as the prior year.

Another week and another full page ad in Target’s circular touting the REDcard Rewards program launched last fall. Nothing unusual about that right? The 5% savings program has been promoted heavily since is arrival last October to the point where it is impossible to look anywhere in a store and not seen 5% Rewards signs.

What’s different about the most recent ad is it enters some new territory in that Target is touting not only that its prices are low, but that they are in fact the lowest because shoppers are able to take advantage of a low-price promise and then save an additional 5%. The concept and messaging is similar to the situation in the home channel where Home Depot and Lowe’s have nearly identical low-price guarantees. However, they go a step further and promise to beat the competitor’s price by 10%, offering shoppers considerable savings on large-ticket purchases.

INSIGHTS

ECRM compared retail circular advertising in May 2015 vs. May 2014 and noted...

SPECIAL REPORTS

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